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A PRACTICAL GUIDE FOR NEXT-OF-KIN INTRODUCTION Whether or not you intend to instruct a solicitor, as next-of-kin you will need to review the deceased’s papers, to establish the extent of his/her personal and financial affairs. This also serves the following purposes: • If you are instructing a solicitor, you will need to organise the paperwork and send all relevant correspondence to him/her; and • If you are winding up the estate yourself, you will need to ascertain the value of the deceased’s estate for the purposes of getting a grant (for which procedure, please see our Client Guide: “A Guide to Probate”), and to determine the extent of the estate to be distributed. Dealing with one’s own paperwork can be a burdensome task; this is generally much more so when reviewing another’s files, which will often be unfamiliar. As such, it can be helpful to have a general outline of how to approach these unknown documents, and to know what to look out for. THE WILL One of the most important documents to be located is the deceased’s will (if any), and any other documents which relate to the will (eg a codicil, which amends a will, or a letter of wishes, giving instructions to Executors). These documents will contain instructions as to the distribution of the deceased’s estate, and the manner in which he or she wants her affairs dealt with. The process to be followed in distributing an estate will depend on whether the deceased left a Will or not (please see our Client Guide, “A Guide to Probate”). Note that a document which declares itself to be a will, or resembles one, may not in fact be legally valid (eg – if the deceased married after signing the document, it may not be binding; in addition, there are various requirements for creating a valid will, the absence of any of which will invalidate it). If you are in any doubt as to its validity, you should contact a solicitor. If you are unable to find a will, but suspect that the deceased did in fact prepare one, you should contact the deceased’s usual solicitor (or any solicitor he or she used during his/her life), financial advisor or accountant. If this is unsuccessful, you may want to consider calling local law firms and requesting that they check their databases for instructions from the deceased. ASSETS Assets comprise the property of the estate – all those items which the deceased owned or had a right to use or benefit from during his or her life. Most assets will manifest themselves in the deceased’s personal papers, the most usual of which are the following: Bank / Building Society Accounts These accounts will usually be evidenced by bank-cards, statements or letters from the institution. Any statements should also be checked for details of any standing orders or direct debits created by the deceased, which ought to be stopped immediately. Some establishments (namely building societies and the Post Office) still issue Pass Books. These should be gathered and retained in one place; they will need to be sent to the institution for cancellation. Any joint-accounts are also relevant, and the deceased will generally be treated as owning one half of the account. The institute will need to be advised of the passing of the deceased, so that they can amend their records accordingly. Shares / Investments The deceased’s papers should be checked for share certificates, dividend notices, or other correspondences from brokers or public companies. Similarly any investments made by the deceased will have generated correspondence from the companies or funds. If you suspect that the deceased did have investments in companies, but cannot find any evidence of this, there are various internet-based companies which will search company registers for you, for a small fee. Business Ventures If the deceased had his / her own business, the next-of-kin will need to ascertain how this was run. If there were other people involved in the business, they will be able to clarify the legal arrangement. However, the deceased’s paperwork should be examined also, to confirm matters, or to yield relevant paperwork. A small business will either have been run by the deceased as a sole-trader, as a partnership, or as a company. If the deceased was a sole trader, there are several immediate steps which will need to be taken (for which please see our Client Guide: “Immediate Post-Death Steps – A Practical Guide for Next-of-Kin”). The business’s accountant should be contacted, so that a value of the business can be ascertained, and any steps for its future determined. A discussion with any business partners of the deceased, or a review of the relevant paperwork, will highlight any formal arrangements which the parties had in place. Likewise, it is common for shareholders of small companies to have written agreements in place which address issues such as what the situation will be upon the death of one of the shareholders. However, if there are no formal arrangements in place, it may be appropriate for the next-of-kin to get professional advice as to the rights of the estate arising from the deceased’s business interest. Insurance / Assurance Policies The deceased’s papers may contain policy papers themselves, or letters from policy providers. You may need to contact the providers to establish whether any payments are due on the death of the deceased, and whether these will form part of his / her estate. Employment Details If a person was employed at the time of their death, details of their employers should, if not already known, be ascertainable through their personal affairs. Any information regarding death–in-service benefits should be in the deceased’s personal papers, otherwise such will be available from the Employer. Pension information might also be included in this, although the deceased might have had a separate pension. Some pensions continue to make payments after the death of the policy-holder, and the Employer or pension provider should be contacted to confirm this. Land / Property If you know that the deceased owned property, or had an interest in property, you should look through his papers for property Title Deeds, or letters from a mortgage company (which will often hold the Title Deeds), or correspondence from solicitors or the Land Registry. If there is a mortgage, the mortgage provider will need to be informed of the deceased’s death, and will be able to advise you as to what steps to take regarding the property. If you are unsure about the status of the deceased’s ownership of property, you can check by telephoning your local Land Registry; for a small fee it will send you copies of the Registry, which records details of the owner, and whether any mortgage or other charge is held over it. Similarly, the deceased’s solicitor or financial adviser will likely have the relevant information and documentation to hand. Other Other matters which you should look out for are: • The deceased passport (this will need to be cancelled) • Information regarding the deceased’s tax-returns • Details of any trust of which deceased was a trustee / beneficiary • Details of any substantial gifts which the deceased made in the seven-year period before his death LIABILITIES Broadly-speaking, liabilities comprise the debts on the estate. Few people die without some form of liability – be it an outstanding utility bill, an ongoing mortgage or bank loan, or unfiled tax returns; such matters must be addressed before the deceased’s estate can be fully administered and distributed. As with an estate’s assets, most liabilities will become apparent during an examination of the deceased’s paperwork. The most common types of liabilities are the following: Mortgages If the deceased was a property owner, it is likely that he or she had a mortgage charged against the property. This will be evident not only from statements from the mortgage provider, but also (if the mortgage is registered – as is almost always the case) from the register held by the Land Registry. Bank Loans / Credit Card Bills If there is any evidence that the deceased had a bank or building society account, it will be worthwhile checking with that institution whether there are any outstanding loans, overdrafts or credit-card accounts which need to be settled. Income Tax Matters Because of the system of self-assessment in the UK, and the timing of the returns, almost all persons will die without being completely up to date with their personal taxes. If you are winding up the affairs of somebody who has died, one task which will befall you is to settle their final tax position. The easiest way to do this is to contact HM Revenue and Customs and advise them of the death; they will respond to you with a final tax form to complete. From this they will establish whether there is any tax owing to the deceased, or any owed by him. In any event, if the deceased had an accountant, you should contact them also as they will likely be familiar with all tax-related matters. Other creditors Most liabilities will become obvious from the deceased’s paperwork. If it appears that the deceased had many creditors, and you suspect that there might be more, it would be worth considering placing a notice in a local newspaper, requesting any people with potential claims to contact the representatives. CONCLUSION Dealing with a deceased's affairs is undoubtedly a daunting task – apart from difficult emotional issues, the actual work involved can be burdensome, time-consuming and confusing (to the extent that people keep records of their financial and other affairs, they are often disorganised and in disarray). While this can be disheartening, it is necessary, and one which you, as a representative of the deceased person, often will have no choice but to undertake. We hope that this guide offers you some support in approaching this task and assists in sorting through the deceased’s affairs. Please note of course that it is not intended as legal advice, and if you have any doubts about the relevance of any matter or any matter relating to the administration of an estate, please seek legal advice. Alternatively, feel free to contact us at any time and we’ll be happy to assist where possible. For further information on the information needed to wind up an estate, and the procedures involved, please see our Client Guides “Immediate Post-Death Steps” and “A Guide to Probate”. ©Clegg Manuel 2008 Clegg Manuel 26-27 Great Sutton Street London EC1V 0DS Tel: 020 7847 5600 cleggmanuel.co.uk |
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